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Hike in export tax rebate unlikely to impact VSF market
11
Jul '08
According to recent reports, export tax rebate on viscose fiber is likely to undergo major adjustments after which the rates may increase by 10 to 15 points.

Earlier it was informed that export tax rebate rate on textiles would increase by 2 percentage points while that for garment would increase by 4 percentage points.

In a way, it may benefit the viscose market by stimulating fibre prices which may in turn change the declining trend and bring about certain amount of profitability.

Previous data shows that since July last year when export tax rebates on viscose fiber were reduced to 5 percent, VSF exports of China have reduced substantially. Besides, RMB appreciation, rising prices of raw materials, slowdown in international economy and other factors have also played a major role in hampering VSF exports.

In the month of May this year, 6782.69 tons of VSF was exported by China registering a year-on-year decline of 24.23 percent. Export volume of viscose filament for the month amounted to 3613.4 tons, down by 24.15 percent or 1150.5 tons than the previous month and by 40.35 percent or 2444.77 tons over the corresponding period last year. In terms of value, exports amounted to US $16.6938 million, representing an annual decline of 23.13 percent.

Experts have voiced a common feeling that drop in viscose fiber is largely due to excessive supply of the raw material in the market. Therefore an increase of export tax rebate on viscose fiber is likely to have little or no impact on prices. They also believe that even with a support policy, it will be difficult to change this downtrend in a short period of time.

Fibre2fashion News Desk - China

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